How to Grow a Sustainable Start-up

Bookmark

No account yet? Register

Learn how to survive and thrive while managing a green start-up. Start-up founders and advisors provide counsel.

Founding a green start-up is “like flying while building the plane and not knowing how to fly.” That’s according to Bas van Abel, who founded cellphone company Fairphone.

Any start-up experience is challenging. But start-up companies with sustainable goals face special difficulties — and opportunities.

How can they survive and thrive? To answer that, we heard from two start-up founders and a start-up advisor. They shared their insights into the highs and lows of sustainable start-up life.

We heard from:

  • Bas van Abel, founder of Fairphone. Fairphone offers a more sustainable smartphone, made with responsibly-sourced minerals and higher labour standards.

  • Theresa Imre, founder and CEO of markta. Markta is an online marketplace for local family farms to sell directly to consumers (“farm to fork”).

  • Ian Hobday, founder and CEO of Startup Gurus. Ian coaches and mentors entrepreneurs in the renewables, electric vehicle, and energy storage markets.

The conversation took place at the Multi-Sector Dialogue on Sustainable Transformation in Vienna.

Watch the video

The speakers emphasized four key lessons, highlighted below. (Responses have been edited.)

There’s no clear strategy for solving a sustainability problem

Bas van Abel: At Fairphone, we started in a strategically naïve way. We really just wanted to create awareness around problems in Central Africa, specifically on conflict related to the mining of minerals.

The supply chain around electronics is so complex – people don’t really know what’s happening behind the scenes. We wanted to bring the story all the way to the consumer. So, we decided that making phones would be a way to see how the world works; if you look through the eyes of the phone, you see the whole world. That’s the journey we took off from.

Theresa Imre: Our mission at markta was clear: An alternative food structure for regional food producers that supported family farms and biodiverse systems. With this big mission, you don’t really know where to start. Before launching the digital marketplace, we spent a lot of time doing field studies to determine what the farmers needed.

But the challenge all green businesses have is that we are always measured against the status quo of large corporations. Customers are used to the cheap logistics of Amazon and extremely quick delivery times. The press was loving us but nobody bought anything.

That all changed when the coronavirus started and people were staying at home during the lockdowns. Suddenly everyone was at home, wanting to order food online, and thinking more about local food production. The orders in one week went from 150 to 2,500. People started using our marketplace, and markta was able to serve its purpose.

Rapid start-up success is exciting but tough

Bas van Abel: You have huge ups and you have huge downs. It can be very difficult when you’re running a start-up and becoming a symbol of change. You can start to feel the pressure. At one point you even start to feel like a fraud, since you’re being congratulated and rewarded, all while feeling like “Who am I?” I collapsed at a certain point with my health – at a certain point your body says, “Stop!”

It’s important to remember that as a founder of a sustainability start-up, you are trying to change a system. At the same time, the system will be dictating your actions. Founders must embrace this dilemma.

Theresa Imre: The focus on start ups is always valuation and being performance-driven, but what is actually needed to stay sane? Having a successful start-up can be a relief, but at the same time it can consume you. As a high-energy person, I was putting all my energy into all my tasks. I would need to sleep an entire weekend just to be functional the following Monday!

I think I’m getting more mature now and have been able to find balance by knowing where my energy is most valuable.

Teams need diverse skills to attract investors and sustain the organization

Ian Hobday: In the early days, the drive and energy you’ve got as a visionary are all you need to make the business succeed. However, for the business to experience long-term growth, you need to surround yourself with people who know how to execute.

More money is being invested today in sustainable businesses than ever before. But although CEOs and founders are passionate, they may not attract investors.

Surround yourself with necessary talent, such as people with expertise in supply chain, logistics or the law. The skillset that these people bring into the team will lift the burden of running the business off the founder, and can make the business more investable.

Bas: With my new company, we have clearer division of responsibility and a solid financial strategy — If that works, life can get a lot easier.

Teresa: Organizational structure is so important. You have to understand your personal qualities – what is your core that you can bring to the company as a founder, and where do you need other people. I’m very happy that my investors give me really good perspectives on what’s needed next.

Start-ups can achieve sustainable goals and make an impact

Although the journey has been challenging, both Fairphone and markta are examples of the impact a sustainable start-up can have.

In 2020 alone, Fairphone sold 94,985 phones, with 56% of focus materials sustainably sourced. Sales doubled that year. Fairphone takes direct action on the ground, e.g. combating child-labour in Uganda with centers for children and youth who have dropped out of the education system.

Next, Fairphone plans to almost double the number of materials in their phones sourced fairly.

Since the start of the pandemic, markta’s ‘farm to fork’ marketplace has supported 150 Austrian family farms in delivering high quality food to regional customers. Markta’s platform has made a huge impact on the financial performance of these family farms; they have survived and even tripled their revenue.

About the Event

The Multi-Sector Dialogue on Sustainable Transformation was held in Vienna in 2021. The Dialogue’s theme was “Radical Change vs. More of the Same?” Leaders from business, the public sector, and academia participated in conversations and networking around cutting-edge sustainability issues. Thanks to Katharina Moser for her moderation. The event was part of the NBS Sustainability Centres Community Workshop and was hosted by Competence Center for Sustainability Transformation and Responsibility (STaR) at Vienna University of Economics and Business and the Institute for Business Ethics and Sustainable Strategy at FHWien University of Applied Sciences for Management & Communication Vienna.

Join the Conversation

Share this post:

Author

  • Kyle Madden is a business and robotics engineering student exploring sustainability topics at the Richard Ivey School of Business in London, Ontario, Canada. He believes that sustainable business practices will reshape society in the coming decades.

Related Articles

Tobin’s q, or The Q Ratio

The Q Ratio, often called Tobin’s q, is a ratio comparing a public company’s market value to its book (or total asset) value. Learn why it’s helpful.

Read More

Responses

Partner with NBS to grow our impact

Skip to content